In first part of the assignments, I have narrowly defined the term accounting profit, forming a technical discussion on the basic accruals concept and the literal difference between accounting profit and true profit. This was portrayed by Hines (1988) as simply ‘measuring the reality’ without questioning who created the reality. Throughout this module, I have developed awareness on the level of sovereignty held by the standards-setters who determine how accounting profit is calculated. Instead of focusing on accrual assumptions, this essay will examine the formulation and implementation of the Conceptual Framework as a whole. The idea of subjectivity in the adoption of accounting policies has also been extended to professional judgements of the regulators. Besides, accounting theories will be applied to shape a contextualised evaluation. For instance, through Critical Theory I begin to question the ‘truth’ initially imparted on me: how reliable is profit figure in financial statement? Two levels of compliance are involved in answering this question, namely compliance between regulators and ethical codes in standards-setting, and between managers and accounting standards. Central to the following discourse would be the money measurement assumption where accounting profit precludes non-monetary elements such as opportunity costs to ensure consistency with part one of the assignments. Reliability of accounting profit – Self-regulation via ethical codes Before being considered a measure of the true profit, reliability of profit figures shall be assessed. As highlighted above, regulators are powerful in a way that profit is ‘the outcome of applying particular accounting rules and conventions … when these rules change, the same series o... ... middle of paper ... ...urvey of ethical behavior in the accounting profession. Journal of Accounting Research, 9 (2), pp. 287-306. Olusegun Wallace, R. 1996. The Development of Accounting Research in the UK. In: Cooke, T. and Nobes, C. eds. 1997. The Development of Accounting in an International Context. London: Routledge, pp. 218-254. Parker, L. D. 1955. Practitioner perspectives on personal conduct. In: Cooke, T. and Nobes, C. eds. 1997. The Development of Accounting in an International Context. London: Routledge, pp. 68-89. Rodgers, P. 2007. International accounting standards. Oxford: CIMA. T.A., L. 1996. Richard Brown, Chartered accountant and Christian gentleman. In: Lee, T. eds. 1996. Shaping the Accountancy Profession: The Story of Three Scottish Pioneers. New York, Garland: pp. 153-221. Wagner, J. W. 2001. Defining Objectivity in Accounting. The Accounting Review July, pp. 599-605.
Dr. Molloy, owner of Medi-Exam Health Services (MEHS), has a seemingly “good problem” within his medical practice. Based on an income statement for the month of August, MEHS had profited $4,000 more than estimated by the profitgraph put together by his accountant. Although this may seem okay due the nature of estimation that comes with profitgraph analysis, Dr. Molloy needs to investigate and understand the root of the discrepancy between the outputs.
Romal, Jane B., and Hibschweiler, Arlene M. "Improving Professionals Ethics: Steps for Implementing Change." The CPA Journal (2004). Retrieved on 16 September 2006 .
Ethic is defined as a set of moral principles or values, a theory of system of moral values, the principles of conduct governing an individual or a group. In all its form, ethics deals with what is good and bad, and with moral duty and obligation. Hence, ethics is either a set of principles held by an individual or group, or the discipline that studies the set of principles (Duska, Duska, & Ragatz, 2011). Ethical theories provide principles that can be useful when solving dilemmas whereas business ethics refers to the ethical values that determine the interaction between a company and its stakeholders. The three major approaches in normative ethics identified are virtue ethics, deontological and utilitarianism (Kraut, 2012), but in this paper the focus is on the two major one proposed for the accounting profession – deontology and utilitarianism.
The stereotypical image correlated to the account mirrors that of a public accountant. An individual working as a public accountant can expect to work as an independent third party to a multitude of companies. As this third party it is their duty to oversee financial transactions to ensure that the statements of not only the company, but also its’ supporting companies, correctly correspond and match up to the position, results and cash-flow of the clientele. This general quota outlining a public accountants job description is not the same for a private accountant. The main difference between a public and private accountant is that unlike the public and its handle on a multitude of accounts, a private accountant specializes with a certain company or field. With this specialization, a private accountant tackles setting up a system that records the transactions within the business. The recordation of the transactions is then generated into statem...
Towards the end of the 20th century it became apparent that companies were beginning to increasingly use an unconventional way of predicting their future performance in earnings. This alternative measure of anticipated earnings was fundamentally based on assumptions rather than historical evidence, which is why it was viewed as being unconventional when casting a business plan. Pro-forma earnings, is scrutinized as being deceptive because the calculations used to come up with the figures weren't a true reflection of the businesses profitability. The earnings reported by companies to no comply to the strict guidelines of the GAAP and companies can manipulate their data or measure to and report earning that are hypothetical (Epstein 2009; James
Brooks, Leonard J. Business & Professional Ethics for Directors, Executives, & Accountants. Mason: Thompson South-Western, 2004. p227.
Marshall, M.H., McManus, W.W., Viele, V.F. (2003). Accounting: What the Numbers Mean. 6th ed. New York: McGraw-Hill Companies.
Financial and Managerial accounting are used for making sound financial decisions about an organization. They provide information of past quantitative financial activities and are useful in making future economic decisions. (Albrecht, Stice, Stice, & Skousen, 2002) The same financial data is used to derive reports for each accounting process yet they differ in some ways. Financial accounting primarily provides external reports for external users such as stock holders, creditors, regulating authority and others. (Garrison, Noreen, & Brewer, 2010) On the other hand Managerial accounting is concern with providing information that deals with the internal viability of the organization and is tailored to meet the needs of an individual organization. (Albrecht, Stice, Stice, & Skousen, 2002)
Wolk, H., Dodd, J., & Tearney, M. (2003). Accounting Theory: Conceptual Issues in a Political and Economic Environment (6th edition ed.). South-Western College Pub.
When working within any professional body, an individual will be subjected to circumstances in which personal ethics will come into play. The Accounting profession is no different as ethical questions arise as part of any working day and can effect how an individual or the company conducts business. These questions can vary greatly in practice from selection of new customers to the rates at which those clients are going to be charged. These ethical questions are raised regularly within the workplace and each employee will react to them differently. The varying reactions will depend on the morality of each individual, or each employees own ‘ethics’. As each employee has their own set of values companies must be alert to the fact that some of their employees may have more ‘flexible’ morals than others. This ‘flexible’ morality can lead to corruption and manipulation within the workplace and can give companies serious problems. As a result of this, all of the main professional accounting bodies have begun to re-introduce mandatory courses teaching ethics to their employees. As well as this, ‘A Guide to professional ethics’ was published which contains a number of different principles in order to govern the behaviour of accountants and also to identify and reduce the greatest areas of risk with respect to unethical behaviour.
This essay will talk about the ethical standards and code of conduct in the accounting profession, in particular for CPA Australia, the importance of ethical education for accounting students, the importance for ethical financial reporting and also addresses ways to deal with conflicts that arise from ethical issues in the
This example is how I will manage recording or analysing my profit and loss figures. On the next page it shows us how figures would compromise if they were high and low. METHOD/AMMOUNTS List of Items £ Stock Purchases During the Period 90,000 Miscellaneous Expenses 1,900 Interest Expenses 3,000 Sales 174,000 Rent from Sub-Letting Part of Workshop 400 Provision for Income Tax 3,275 Opening Stock ...
Accounting has been a living part of history since the Neolithic period and remains a prevalent and ever-evolving profession still to this day. This essay therefore proposes to look at the significance and role of history specifically related to the accountancy field. In order to substantiate this claim of the importance of accounting history, numerous benefits of accounting history will be presented. Factors such as the use of historical research and its availability thereof to constantly develop accounting policies will be discussed as well as how historical accounting practices can be used to understand current practice and assist in the training of individuals in the accounting field. Lastly, the importance of history in the development
From the first tutorial, ‘Current Conceptions of Accounting’, we had already change our prediction on accounting professional. At the beginning, we through that accounting professional would be more formal and format. From what we have learnt from the first two semesters of accounting, we need to do everything under the current structure, standards, and regulations. Accounting is a tool and skill that help us to achieve our career successful. However, the first tutorial activity, which require us to bring up our view of ‘accounting, accountability, or an accountant’ from a lifestyle magazine. This activity make us found that accounting could be just next to us, not just in the career field, but also could find it anywhere in our life. This activity has open up our mind of accounting
Because of the unawareness of the subject matter in general public, little use of available information technology by accountants and ignoring social & environmental factors to report with mere numbers, a common perception is developed that accountants are dull, conservative and preoccupied with numbers. Yet all is not lost. Change is afoot!